8/10/2019 Lbp vs Obias (2012)
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1. LBP VS. OBIAS
FACTS: Pursuant to the Operation Land Transfer (OLT) Program of
Presidential Decree (P.D.) No. 27, an aggregatearea of 34.6958
hectares composing three parcels of agricultural land located at
Himaao, Pili, Camarines Surowned by THE respondents (landowners)
were distributed to the farmers-beneficiaries (farmers).
As a result, the owners had to be paid just compensation for the
property taken. The Department of AgrarianReform (DAR), using the
formula under P.D. 27 and Executive Order (E.O.) 228, came up with
a computation of thevalue of the acquired property at
P1,397,578.72. However, the amount was contested by the landowners
as aninadequate compensation for the land. Thus did they filed a
complaint for determination of just compensationbefore the RTC of
Naga City, the assigned Special Agrarian Court (SAC) which has
jurisdiction over the complaint.
To ascertain the amount of just compensation, a committee was
formed by the trial court. The Provincial Assessorof Camarines Sur
was appointed as the Chairman and the representatives from the Land
Bank of the Philippines(LBP), DAR, the landowners and farmers, were
appointed as the Members. The Provincial Assessor recommendedthe
above average value of P40,065.3 1 per hectare as just
compensation; LBP Representative EdgardoMalazarte recommended the
amount of P38,533.577 per hectare; and the representative of the
landowners, Atty.Fe Rosario P. Bueva submitted a P180,000.00 per
hectare valuation of the land. None of these recommendations
was adopted in the by the trial court.
Both the landowners and LBP appealed the trial courts decision
before the CA. The appellate court vacated thedecision of the trial
court. It relied heavily on Gabatin v. Land Bank of the Philippines
ruling wherein this Courtfixed the rate of the government support
price (GSP) for one cavan of palay at P35.00, the price of the
palay at thetime of the taking of the land. Following the formula,
Land Value= 2.5 multipl ied by the Average Gross Production(AGP)
multiplied by the Government Support Price (GSP), provided by P.D.
No. 27 and E.O. 228, the value of thetotal area taken will be
P371,015.20 plus interest thereon at the rate of 6% interest per
annum, compoundedannually, starting 21 October 1972, until fully
paid. Hence, this petition.
ISSUE: WON the payment of interest shall be made until full
payment thereof.
HELD: To answer the contention of LBP that there should be no
payment of interest when there is already aprompt payment of just
compensation, the High Court discussed that even though the LBP
immediately paid theremaining balance on the just compensation due
to the petitioners after this Court had fixed the value of
theexpropriated properties, it overlooks one essential fact from
the time that the State took the petitionersproperties until the
time that the petitioners were fully paid, almost 12 long years
passed. This is the rationale forimposing the 12% interest in order
to compensate the petitioners for the income they would have made
hadthey been properly compensated for their properties at the time
of the taking.
This Court is not oblivious of the purpose of our agrarian laws
particularly P.D. No. 27, that is, to emancipatethe tiller of the
soil from his bondage; to be lord and owner of the land he
tills.
Section 4, Article XIII of the 1987 Constitution mandates that
the State shall, by law, undertake an agrarian reformprogram
founded on the right of farmers and regular farm workers who are
landless, to own directly or collectivelythe lands they till or, in
the case of other farm workers, to receive a just share of the
fruits thereof. It also providesthat the State shall encourage and
undertake the just distribution of all agricultural lands subject
to the payment of
just compensation.
Further, the deliberations of the 1986 Constitutional Commission
on this subject reveal that just compensation
should not do violence to the Bill of Rights, but should also
not make an insurmountable obstacle to a successful
